UK PAYROLL
Student loan deductions, explained.
Find out which plan you are on, see how the threshold and 9 percent rate apply to your salary, and learn how to fix a wrong deduction.
Educational estimates only. Not tax, legal, financial, payroll or employment advice. Verify with your employer's payroll team or HMRC.
Read more on UK student loans
Plan 1 explained
For pre-2012 students. Threshold £26,065 in 2026/27.
Plan 2 explained
For 2012-2023 starters. Threshold £29,385.
Plan 4 explained
For Scottish students. Threshold £33,800.
Plan 5 explained
For 2023+ starters in England. Threshold £25,000.
Postgraduate Loan
6 percent rate above £21,000.
Two loans simultaneously
How Plan 1 + Postgraduate work together.
Common questions
Which plan am I on?
Your plan depends on when and where you started your course. Plan 1 is for English/Welsh students who started before September 2012, Plan 2 is for 2012-2023 starters, Plan 4 is Scottish, Plan 5 is for 2023+ English starters. Check your loan agreement letter from the Student Loans Company.
Why is my student loan deduction so high?
The deduction is 9 percent of every pound you earn above the threshold (6 percent for Postgraduate Loan). A bonus or overtime can push that month's pay well above the threshold, generating a much larger deduction than usual, even though the annual rate is unchanged.
Will I get a refund if I paid too much?
Possibly. Once HMRC finalises your annual return, the Student Loans Company reconciles your payments. Overpayments above the annual threshold are refunded automatically. You can also request a refund mid-year if your earnings dropped below the threshold.
What happens if I have two student loans at once?
Most commonly Plan 2 (undergraduate) plus Postgraduate Loan. Both deductions apply simultaneously: 9 percent above £29,385 plus 6 percent above £21,000. Your payslip will show two separate lines.
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Open the toolPayslipIQ provides educational information and estimated calculations only. It does not provide tax, legal, financial, payroll, accounting, pension, benefits or employment advice. Always verify your payslip, tax code, deductions and take-home pay with your employer's payroll department, HMRC, your pension provider, a qualified accountant, tax adviser or another appropriately qualified professional.